INCOME TAX

BASICS &
DEDUCTIONS
 TAX
• Taxes are mandatory payments collected
from individuals and corporations by a
government entity to fund government
activity.

• Taxation is the primary source of income for

the government.

• In simple words Tax is the charge that you

are paying to Govt. for all the services
rendered.
 Basis
Direct Tax
The tax that is levied by the
government directly on the
Meaning
individuals or corporations are
called Direct Taxes.
The incidence and impact of
Incidence the direct tax fall on the same
person.
Income Tax, Corporation Tax
Examples
and Wealth Tax.
Both Social and Economical.
Social objective of direct tax is
the distribution of income. A
person earning more should
Objective
contribute more in the provision
of public service by paying
more tax. This provision is also earning 3000 Re a month. This
known as progressive taxation.
Impact Not at all Inflationary.
Indirect Tax
The tax that is levied by the
government on one entity
(Manufacturer of goods), but is
passed on to the final consumer
by the manufacturer.
The incidence and impact of
the tax fall on different
persons.
VAT, Service tax, GST, Excise
duty, entertainment tax and
Customs Duty.
Only Economical. When an
indirect tax is levied on a
product, both rich and poor
must pay at the same rate. A
person earning 10 lakh a month
pays the same tax on the
Wheat purchase as the person
principle is called regressive
taxation.
Is inflationary.
In FY22 the central govt collected gross tax of
27.07 lakh crores.
5% of people paid tax in FY22.
What does the Government do with this
collected tax?
 TAX PAYER IS THE
REAL OWNER OF THIS COUNTRY
 Heads Under Income Tax

1. Income from Salary (Includes other benefits also)

2. Income from House Property
3. Income from profit & Gains from Business & Profession
4. Income from Capital Gains (Sale of Property, Stocks, Equity)
5. Income from Other Sources (Bank Interest, Lottery, Horse
racing, Gift received, Interest from Govt. Bonds etc. )
GROSS TOTAL
INCOME
Head of Income Amount
Salary 6,00,000 

House Property 1,00,000 

Profit & Gain from Biz &

1,00,000 
Profession
Capital Gains 1,00,000 

Income Other Sources  1,00,000

GROSS TOTAL INCOME 10,00,000

Gross Total Income - Exemptions =

Taxable Income

Taxable Income – Deductions =

Net Taxable Income
TAX SLABS for AY 2022-23
New Tax Regime u/s 115BAC

Income Tax Slab Income Tax Rate

Up to ₹ 2,50,000 Nil

₹ 2,50,001 - ₹ 5,00,000 5% above ₹ 2,50,000

₹ 5,00,001 - ₹ 7,50,000 10%

₹ 7,50,001 - ₹ 10,00,000 15%

₹ 10,00,001 - ₹ 12,50,000 20%

₹ 12,50,001 - ₹ 15,00,000 25%

Above ₹ 15,00,000 30%

 EXEMPTIONS
• HRA
• LTA
• Children education allowance
• REIMBURSEMENTS
• Sodexo
Net taxable income=
10,00,000 - 2,00,000= 8,00,000 (HRA)
8,00,000 - 50,000 = 7,50,000 (LTA/ Reimbursements)
7,50,000 - 50,000 = 7,00,000 (Standard)
7,00,000 - 1,50,000 = 6,50,000 (80C)
6,50,000 - 25,000 = 6,25,000 (80D) (H. Insurance)
6,25,000 - 1,00,000 = 5,25,000 (80E/ 80DD) (Edu loan
interest/Dependents’ medical expenditure)
5,25,000 - 50,000 = 4,75,000 (80CCD) (NPS/APY)
Net Taxable Income= 4,75,000
Rebate
Rebate under section 87A can be claimed when
your taxable income does not exceed the
prespecified limit for the given financial year.
Example- for FY22, if the taxable income is upto
5,00,000 then you don’t need to pay any taxes.
Ansuman Kar